Following a short restriction (from just ahead of the pandemic outbreak), Credit Suisse resumes coverage, upgrading to Outperform from Neutral, and reducing the target to NZ$1.40 from NZ$3.65.
The broker acknowledges there is earnings uncertainty but believes the strength of the company’s execution during the lockdown, the consumer appeal of its brands and robust balance sheet contribute to confidence going forward.
The broker assumes revenues decline by -55% in the second half compared with FY19, with the company not fully returning to FY19 levels until the first half of FY23. This drives substantial revisions to underlying estimates for operating earnings (EBITDA).
Sector: Retailing.
Current Price is $0.96. Target price not assessed.